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                        DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)       ISCR Case No. 09-06043
)
)
Applicant for Security Clearance )
Appearances
For Government: David A. Hayes, Esq., Department Counsel
For Applicant: David Price, Esq.
                                                                            
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Decision
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LYNCH, Noreen A, Administrative Judge:
On September 30, 2010, the Defense Office of Hearings and Appeals (DOHA)
issued a Statement of Reasons (SOR) alleging security concerns arising under
Guideline F (Financial Considerations). The action was taken under Executive Order
10865, Safeguarding Classified Information within Industry (February 20, 1960), as
amended; Department of Defense (DoD) Directive 5220.6, Defense Industrial
Personnel Security Clearance Review Program (January 2, 1992), as amended
(Directive); and the adjudicative guidelines (AG), implemented in September 2006. 
Applicant timely answered the SOR and requested a hearing. DOHA assigned
the case to me on December 23, 2010. A notice of hearing was issued on January 13,
2011, and the case was heard on February 1, 2011. Department Counsel offered five
exhibits, which were admitted without objection as Government Exhibits (GE) 1-5.
Applicant testified and submitted exhibits AE A through AE H (with 36 attachments) at
the hearing, which were admitted without objection. DOHA received the transcript (Tr.)
on February 9, 2011. Based on a review of the pleadings, submissions, testimony, and
exhibits, I find Applicant met her burden regarding the security concerns raised.
Security clearance is granted.
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Findings of Fact
Applicant is a 55-year-old employee of a defense contractor. She graduated from
high school and attended college for approximately one year. Applicant is divorced and
has four children. Applicant served in the U.S. Marine Corps from 1976 to 1996. (AE E)
She has worked for her current employer since April 2009. (GE 1)
Financial
Applicant worked in the banking industry after retiring from military service. She
was successful and had no financial difficulties until February 2007, when she resigned
her bank manager position due to a policy disagreement. After her position ended, she
had every expectation that she would find comparable work. She experienced
unemployment from February 2007 until May 2007. She was forced to accept various
low-paying jobs so that she could pay her expenses. She was also unemployed later
from February 2008 until March 2009. (GE 1) She fell behind in paying her bills and
voluntarily returned her car in 2007. 
In September 2006, when working as a bank manager, Applicant and her
fiancee purchased a home for approximately $620,000. They obtained two home
mortgages split 80/20. (Tr. 31) They had planned to refinance the home in one year, but
due to the housing market, that did not occur. They are still living in the home. They had
difficulty paying the mortgages after 2007, when Applicant experienced unemployment.
(Tr. 34) The smaller mortgage has been modified and is current. (GE 2) The larger
mortgage is in the process of modification.
The SOR lists 17 delinquent accounts totaling approximately $17,100. The debts
include judgments, medical accounts, vehicle repossession, and a past-due home
mortgage of $117,000. The credit reports confirm them. (GE 3, 4, and 5) Applicant
contacted a company to help her with her delinquent bills, especially with the home
mortgage. She paid an agency an initial fee of $2,000, but they did not help her. They
did advise her to not make any payments on her home mortgages. (AE D)  
At the hearing, Applicant presented documentation that she has paid the
accounts in SOR ¶ 1.a through 1.e, which totaled $1,367; ¶ 1.i through 1.m. for a total
of $1,387; and ¶ 1.o through 1.q for a total of $1,247.59. (AE A-E; AE I through M; and
AE O through Q). She has two accounts in a payment plan for SOR ¶ 1. f and 1.g. The
payment plan for SOR ¶ 1.f consisted of three payments of $400 to settle the account.
The final payment occurred in mid-January 2011. She settled the account in ¶1.g (car
repossession) for $5,000 by paying monthly. Applicant will complete her final payment
of $1,000 in April when she receives her income tax refund.
  
At the hearing, Applicant explained that due to her unemployment and lower
paying jobs, she could not pay her bills in a timely manner. She also explained that her
jobs paid just enough to pay a portion of her mortgage. She used credit cards to pay
some other bills.(Tr. 68) She contacted her creditors and decided to pay the larger bills
first. (Tr. 70) She disclosed her financial difficulties on her security clearance
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application. At no time was Applicant shirking her responsibility to her creditors.
Applicant denied the account in SOR allegation ¶ 1.n because it has been paid years
ago, but it has not been removed from the credit report. She continues to seek its
removal.
When Applicant and her fiancee could not manage the mortgage payment for
the 80% loan in 2008, they contacted the bank, that held the mortgage to discuss a
loan modification. During the process, another bank bought the loan. While they were
discussing the modification with that bank another bank bought the loan. (AE G) At the
same time, Applicant wrote to a national company to mediate the loan modification
issue. She paid a fee of $2,000 to them and was advised not to pay the mortgage. (Tr.
36). The national company did not mediate the issue and referred Applicant to
Nationwide Homeowner’s Retention Program (NHRP). The NHRP agreed to help with a
budget, but did not offer any other assistance. (Tr. 39) After that, Applicant obtained the
services of a law firm to liaison with the third bank. In January 2010, Applicant received
a letter from the third bank with details concerning the Home Affordable Modification
Program. (AE D) Applicant submitted requested documentation to the bank. In
December 2010, Applicant believed that the loan modification was complete. However,
she received a request for more documentation. Applicant has contacted the bank
numerous times, and she is frustrated as she does not understand why the loan
modification is not moving quickly. Her latest communication with the third and current
bank in February 2011 revealed that the bank is looking for another lender to purchase
the mortgage. (Tr. 73)
Applicant’s monthly net income is $3,300. Her military annuity is $1,500. Her
fiancee also has an income of approximately $4,000 per month. Applicant has a
budget. Applicant received financial counseling. She and her fiancee have bank
accounts and some savings, including a 401(k) account. Applicant is current on her
daily expenses and her car loan. They have a net monthly remainder of approximately
$1,000. 
Applicant’s employer describes her as an exemplary employee, who conducts
herself with professionalism and is highly regarded by her peers. (AE F) She is a great
asset to the company. Her employer is aware of the financial issues and approves of
her efforts to address and resolve them.
Applicant had a distinguished career in the Marine Corps. (AE H) She was a
mentor to young Marines. She served overseas on numerous occasions, and helped
with training programs. When she retired from the military, the commandant praised her
dedication and achievements. He described her as an example to young Marines
because of her values. 
Applicant submitted numerous character references, attesting to her devotion to
duty, and professionalism. A coworker describes Applicant as extremely competent,
efficient, and organized. She is described as a true asset to any organization. (AE H)
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      1
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      2
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      3
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      4
information), and EO 10865 § 7.
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Policies
When evaluating an applicant’s suitability for a security clearance, an
administrative judge must consider the adjudicative guidelines (AG). In addition to brief
introductory explanations for each guideline, the adjudicative guidelines list potentially
disqualifying conditions and mitigating conditions. These guidelines are not inflexible
rules of law. Instead, recognizing the complexities of human behavior, they are applied
in conjunction with the factors listed in the adjudicative process. An administrative
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.
Under AG ¶ 2(c), this process is a conscientious scrutiny of a number of variables
known as the “whole-person concept.” An administrative judge must consider all
available, reliable information about the person, past and present, favorable and
unfavorable, in making a decision.
The protection of the national security is the paramount consideration. AG ¶ 2(b)
requires that “[a]ny doubt concerning personnel being considered for access to
classified information will be resolved in favor of national security.” In reaching this
decision, I have drawn only those conclusions that are reasonable, logical, and based
on the evidence contained in the record. Likewise, I have avoided drawing inferences
grounded on mere speculation or conjecture.
The Government must present evidence to establish controverted facts alleged
in the SOR. An applicant is responsible for presenting “witnesses and other evidence to
rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by
Department Counsel. . . .”  The burden of proof is something less than a1
preponderance of evidence.  The ultimate burden of persuasion is on the applicant.  2 3
A person seeking access to classified information enters into a fiduciary
relationship with the Government based on trust and confidence. This relationship
transcends normal duty hours and endures throughout off-duty hours. The Government
reposes a high degree of trust and confidence in individuals to whom it grants access to
classified information. Decisions include, by necessity, consideration of the possible risk
the applicant may deliberately or inadvertently fail to protect classified information. Such
decisions entail a certain degree of legally permissible extrapolation of potential, rather
than actual, risk of compromise of classified information.
 
Section 7 of Executive Order 10865 provides that decisions shall be “in terms of
the national interest and shall in no sense be a determination as to the loyalty of the
applicant concerned.”  “The clearly consistent standard indicates that security clearance4
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      5
 Id.      6
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determinations should err, if they must, on the side of denials.”  Any reasonable doubt5
about whether an applicant should be allowed access to sensitive information must be
resolved in favor of protecting such information.  The decision to deny an individual a6
security clearance does not necessarily reflect badly on an applicant’s character. It is
merely an indication that the applicant has not met the strict guidelines the President
and the Secretary of Defense established for issuing a clearance.
Analysis
Guideline F, Financial Considerations
The security concern for Financial Considerations is set out in AG ¶ 18:
Failure or an inability to live within one’s means, satisfy
debts, and meet financial obligations may indicate poor self-
control, lack of judgment, or unwillingness to abide by rules
and regulations, all of which can raise questions about an
individual’s reliability, trustworthiness and ability to protect
classified information.” It also states that “an individual who
is financially overextended is at risk of having to engage in
illegal acts to generate funds.
Applicant had 17 delinquent debts in the approximate amount of $17,000 for a
number of years. She has a past-due amount of $117,000 on a home mortgage.
Consequently, Financial Considerations Disqualifying Condition (FC DC) AG ¶ 19(a)
(inability or unwillingness to satisfy debts), and FC DC AG ¶ 19(c) (a history of not
meeting financial obligations) apply. With such conditions raised, it is left to Applicant to
overcome the case against her and mitigate security concerns.  
Applicant was unemployed for various periods of time in 2007 and 2008. She
accepted lower paying positions after her last banking position ended in 2007. She was
not able to pay her bills in a timely fashion. Prior to 2007, she had no financial
difficulties. Applicant consistently used good judgment in her finances. The past-due
mortgage situation is unlikely to recur. Consequently, Financial Considerations
Mitigating Condition (FCMC) AG ¶ 20(a) (the behavior happened so long ago, was so
infrequent, or occurred under such circumstances that it is unlikely to recur and does
not cast doubt on the individual’s current reliability, trustworthiness, or good judgment)
applies.
Financial Considerations Mitigating Condition (FC MC) AG ¶ 20(b) (the
conditions that resulted in the behavior were largely beyond the person’s control (e.g.,
loss of employment, a business downturn, unexpected medical emergency, or a death,
divorce or separation) and the individual acted responsibly under the circumstances)
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applies. Applicant was successful in the banking industry after she left the military.
When she left her banking position in 2007, she had difficulty finding comparable work.
She was underemployed and unemployed, which greatly impacted her ability to pay her
bills. In addition, due to the housing market, the home she and her fiancee purchased
in 2006 could not be refinanced. This led to past-due mortgage payments. She
immediately tried to get professional help and was advised not to pay the mortgage.
She started paying her delinquent debts as soon as she was gainfully employed. She
contacted a law firm to help with a loan modification program. She acted reasonably
under the circumstances. 
FC MC AG ¶ 20(d), (the individual initiated a good-faith effort to repay overdue
creditors or otherwise resolve debts) applies. Applicant provided evidence of payments
for all the delinquent accounts. She credibly denied one small account. The past-due
home mortgage has been ongoing for several years, but Applicant has diligently been
working on a loan modification. She was able to get a modification on the smaller
mortgage. She has contacted the current bank. She hired a law firm to help negotiate
her loan modification. She paid the national company $2,000 to mediate the loan. She
has not wavered in her efforts to rectify the loan. In December 2010, it appeared that
the loan modification was complete, but more documentation was requested. She
appears to be caught in the bureaucracy of a home modification program. Applicant
completed financial counseling, developed a budget, and pays her monthly expenses.
FC MC AG ¶ 20(c) (the person has received or is receiving counseling for the problem
and there are clear indications that the problem is being resolved or is under control)
applies.
Whole-Person Concept
Under the whole-person concept, the administrative judge must evaluate an
applicant’s eligibility for a security clearance by considering the totality of an applicant’s
conduct and all the circumstances. The administrative judge should consider the nine
adjudicative process factors listed at AG ¶ 2(a): 
(1) the nature, extent, and seriousness of the conduct; (2)
the circumstances surrounding the conduct, to include
knowledgeable participation; (3) the frequency and recency
of the conduct; (4) the individual’s age and maturity at the
time of the conduct; (5) the extent to which participation is
voluntary; (6) the presence or absence of rehabilitation and
other permanent behavioral changes; (7) the motivation for
the conduct; (8) the potential for pressure, coercion,
exploitation, or duress; and (9) the likelihood of continuation
or recurrence. 
Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a
security clearance must be an overall commonsense judgment based upon careful
consideration of the guidelines and the whole-person concept. As noted above, the
ultimate burden of persuasion is on the applicant seeking a security clearance. 
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I considered the potentially disqualifying and mitigating conditions in light of all
the facts and circumstances surrounding this case as well as the “whole-person”
factors. Applicant is 55 years old. She served honorably in the U.S. Marine Corps for 20
years. She is praised for her dedication to her country. She is described by her
employer as an exemplary employee. She is a responsible parent and had no financial
difficulties before 2007. Applicant was successful in the banking field after leaving the
military. She had great difficulty in finding employment after her banking position in
2007. She accepted lower paying positions to pay her bills. She experienced
unemployment. 
The unexpected unemployment combined with the housing market crisis in 2008,
left Applicant with an inability to maintain her bills and her monthly mortgage. She has
worked diligently to pay her delinquent bills. She has also modified her smaller
mortgage. She has documented and testified credibly that she has worked since 2008
to get the larger mortgage modified. At no time did she act in an unreasonable manner.
She has taken responsibility for her situation. She does not want to lose her home and
lose it to foreclosure. She does not want to walk away from the home. Applicant was
candid and forthright in the entire security clearance process. She disclosed her
financial delinquencies on her security clearance application. She was organized at the
hearing and has shown that at one point in time, in December 2010, the loan
modification was to be resolved. At the last minute that did not occur, but through no
fault of Applicant. Applicant impressed me as a professional who is determined to
resolve the final hurdle in her financial situation. I have no doubts about her sincerity
and find that it is clearly consistent with the national interest to grant a security
clearance. 
Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR,
as required by section E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: FOR APPLICANT
Subparagraphs 1.a through 1.q: For Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is
clearly consistent with the national interest to grant Applicant a security clearance.
Clearance is granted.
                                                     
NOREEN A. LYNCH.
Administrative Judge
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